Retention under FIDIC contracts in the UAE
Retention is the employer holding back a slice of every certificate as security, and releasing it in two halves. On a FIDIC job the two halves fall at Taking-Over and at the end of the defects period.
QScope Team · 12 July 2026 · 5 min read
Retention on a FIDIC contract in the United Arab Emirates is the employer holding back a percentage of each Interim Payment Certificate as security against defects and incomplete work. It is deducted as the job runs, capped at a limit, and released in two stages tied to completion. Handled loosely it becomes money forgotten on the balance sheet. Handled properly it is cash with a date.
The deduction and the limit
Under Sub-Clause 14.3, retention is deducted from each Statement at the percentage set in the Appendix to Tender, commonly five or ten per cent, until the accumulated retention reaches the limit of retention money, often five per cent of the accepted contract amount. Once the limit is reached, no further retention is taken and the certificates pay in full. Two numbers govern the whole mechanism: the rate at which it builds, and the ceiling at which it stops.
Release in two halves
Sub-Clause 14.9 releases the retention in two parts, and the two dates are the ones to hold.
- First half, at Taking-Over. When the Engineer issues the Taking-Over Certificate for the works, the first half of the retention money is certified for payment.
- Second half, at the end of the Defects Notification Period. When the Defects Notification Period has expired and outstanding defects have been made good, the remaining half is certified.
Where the contract has taken over sections separately, the release is apportioned to each section as it is taken over, which is easy to miss on a job that completes in phases.
Why it goes uncollected
The first half is usually claimed, because Taking-Over is a visible event. The second half is the one that slips. The Defects Notification Period ends quietly, a year or more after the site felt finished, and by then the team has moved on. Nobody serves the application, and the retention sits with the employer earning nothing for the contractor. The fix is to diary the release date the moment the period is set, and to treat the second half as a receivable with a due date rather than a loose end.
QScope deducts retention on the FIDIC percentage up to the stated limit, splits the release into its two halves against Taking-Over and the Defects Notification Period, and shows the retained balance on every job at a glance.